United States of America, et al. v. Pacific Dermatology Institute, Inc., et al Case No. 5:20-cv-01906-JGB-SHK United States District Court, C.D. California Filed June 25, 2024 Counsel Grace Y. Park, Cotchett, Pitre and McCarthy LLP, Burlingame, CA, for Plaintiff United States of America. Wilmer J. Harris, Schonbrun Seplow Harris Hoffman and Zeldes LLP, South Pasadena, CA, Mike Bothwell, Pro Hac Vice, Bothwell Law Group, PC, Roswell, GA, for Plaintiff Randy Jacobs. Matthew Donald Umhofer, Diane H. Bang, Elizabeth Anne Mitchell, Jonas Palmer Mann, Umhofer, Mitchell and King LLP, Los Angeles, CA, for Defendant Pacific Dermatology Institute, Inc. Elizabeth Anne Mitchell, Jonas Palmer Mann, Matthew Donald Umhofer, Umhofer, Mitchell and King LLP, Los Angeles, CA, for Defendant Richard Rotan, Jeffrey Bottomley. Kewalramani, Shashi H., United States Magistrate Judge Proceedings (IN CHAMBERS): ORDER DENYING DEFENDANTS' MOTION FOR PARTIAL RECONSIDERATION AND CLARIFYING SCOPE OF WAIVER [ECF No. 154] *1 Before the Court is Defendants Pacific Dermatology Institute, Inc.'s (“Pacific Dermatology”) and Bradley Mudge's (“Mudge”) (collectively, “Defendants”) Motion for Partial Reconsideration and Clarification of Order [ECF No. 140] Granting Relator's Motion to Compel Production (“Reconsideration Motion” or “Recon. Mot.”). Electronic Case Filing Number (“ECF No.”) 154, Recon. Mot. After reviewing the parties' arguments and for the reasons set forth in this Order, the Court DENIES Defendants' Reconsideration Motion. For clarification purposes, the Court notes that the waiver of Defendants' attorney-client privilege and work product protections will be limited to prior to the commencement of this litigation on September 9, 2020. I. BACKGROUND A. Procedural History On September 9, 2020, Relator Randy Jacobs (“Relator”) filed a qui tam complaint (“Complaint”) against Defendants under the False Claims Act (“FCA”), 31 U.S.C. § 3729, et seq., and the California False Claims Act, Cal. Gov't Code § 12651, et seq. ECF No. 1, Compl. at 3. The operative complaint in this case is Relator's First Amended Complaint (“FAC”) filed on September 7, 2023. ECF No. 115, FAC. Discovery was stayed in this case until January 8, 2024, following the parties' briefing of Defendants' Motion to Dismiss, see ECF Nos. 119, 126, 129, which the Court ruled on granting in part and denying in part.[1] See ECF No. 131, Order Granting Second Joint Stipulation to Extend Dates and Temporarily Stay the Case; ECF No. 169, Order (1) Granting in Part and Denying in Part Defs. Pacific Dermatology Institute and Mudge's Mot. to Dismiss (Dkt. No. 119); (2) Granting in Part and Denying in Part Defs. Bottomley and Rotan's Mot. to Dimiss (Dkt. No. 137); and (3) Vacating the May 20, 2024 Hearing. The discovery cut-off date in this matter was extended to October 19, 2024. ECF No. 145, Order Granting Third Joint Stipulation to Extend Dates. B. The Disputed Discovery The background of the disputed discovery was summarized in the Court's February 1, 2024 Order Granting Relator's Motion to Compel Production [ECF No. 89] (“MTC Order”) as follows: On October 12 and 13, 2022, Relator sent his Requests for Production of Documents (“First RFPs”) and Interrogatories (“First Interrogatories”) to Defendants. ECF No. 89, [Motion to Compel Responses and Production Due to Waiver] [(“]MTC[”)] at 4. After requesting an extension to respond to the First RFPs and First Interrogatories, Defendants failed to meet the agreed upon extension request; instead producing some documents without responses to Relator's First RFPs in early January 2023. See id. at 5. On February 15, 2023, Defendants responded to the First RFPs and First Interrogatories. Id. at 6. On February 28, 2023, an informal discovery dispute conference was held before the Magistrate Judge regarding the lack of Defendants' responses to Relator's First RFPs and First Interrogatories. ECF No. 69, First Minute Order re Discovery Hearing. The First Minute Order re Discovery Hearing noticed that “Defendants provided responses to Plaintiff's Request for Admissions and provided responses to the Interrogatories in February 2023” and that a further hearing would be held on “the status of Defendants['] responses to the [First] RFPs.” Id. *2 On March 8, 2023, a second informal discovery dispute conference was held before the Magistrate Judge, in which the parties stated that they “met and conferred extensively to determine their next course of action with respect to the production of documents” and “have reached an agreement and if further dispute arises after the documents have been reviewed then they will reach out to the Court.” ECF No. 81, Second Minute Order re Discovery Hearing. On April 6, 2023, a third informal discovery dispute conference was held before the Magistrate Judge, and the parties were ordered to brief “the relevant timeframe of responsive documents [the RFPs] propounded on the [D]efendants.” ECF No. 85, Third Minute Order re Discovery Hearing. ECF No. 140, MTC Order at 2. Following the third discovery conference, Defendants withdrew their objection that “discovery was limited in scope to 2017 due to certain exemplary claim submissions cited in Relator's Complaint[.]” See ECF No. 89, MTC at 3. On April 14, 2023, Relator filed an MTC, asking the “Court to formally acknowledge that all of Defendants' objections to Relator's [F]irst Interrogatories and [RFPs] are waived for untimeliness.” Id. at 4. On April 28, 2023, Defendants filed an Opposition to Relator's Motion to Compel Responses and Production Due to Waiver of Objections (“MTC Opposition”). ECF No. 93, MTC Opp'n. On May 1, 2023, Defendants filed an Amended Opposition to Relator's Motion to Compel Responses and Production Due to Waiver of Objections (“Amended MTC Opposition”). ECF No. 94, Am. MTC Opp'n. On May 11, 2023, Relator filed a Reply In Support of the Motion to Compel (“MTC Reply”). ECF No. 100, MTC Reply. On February 1, 2024, the undersigned Magistrate Judge issued the MTC Order, in which the Court held “any objections in Defendants' responses to the First RFPs and Interrogatories are waived.” ECF No. 140, MTC Order at 6. On March 15, 2024, Defendants filed the Reconsideration Motion. ECF No. 154, Recon. Mot. On March 19, 2024, Relator filed his Opposition to the Reconsideration Motion (“Opposition” or “Opp'n”). ECF No. 156, Opp'n. On April 24, 2024, Defendants filed a Reply In Support of the Reconsideration Motion (“Reply”). ECF No. 163, Reply. C. The Parties' Arguments 1. Defendants' Reconsideration Motion First, Defendants argue that “[t]hough untimely responses to requests for production can result in waiver of objections [Fed. R. Civ. P. 34 (b)(2)], waiver of objections based on privilege does not automatically result from noncompliance with Fed. R. Civ. P. 26(b)(5).” ECF No. 154, Recon. Mot. at 5 (brackets in the original). Defendants submit that the Court erred in finding waiver of attorney client privilege and work product based on untimeliness because: (1) the Court found that Defendants did not act in bad faith, id. at 6; (2) “Defendants provided substantive responses, including inserting privilege claims, prior to any court intervention[,]” id.; and (3) “the parties engaged in significant informal efforts to resolve discovery disputes which resulted in Defendants ... [producing] all non-privileged, responsive documents and a privilege log[,]” id. Defendants add that “[t]he necessity of these deeply rooted [attorney-client and work product] protections is demonstrated by Relator's egregious attempts to indefensibly leverage this Court's [MTC O]rder[,]” by insisting that “not only must Defendants disclose all attorney-client communications and work product as of the date of the [MTC O]rder, but that they must continue to disclose all such information and documents on an ongoing basis for the remainder of the case.” Id. at 7-8. *3 Finally, Defendants argue “[r]egardless of the court's finding on waiver of objection, the limitations on scope of discovery contained in [Federal Rule of Civil Procedure] [(“]Rule[”)] 26(b)(1) still apply to discovery sought be Relator[.]” Id. at 8. Defendants emphasize that the Court retains discretion regarding the scope of discovery even where objections are untimely. Id. at 9. 2. Relators' Opposition Relator asserts that Defendants have engaged in delay tactics to avoid discovery obligations, including “refus[ing] to comply with the [MTC] Order or provide any sort of timeline for doing so” and “offer[ing] to do some limited searches ... if Relator agreed not to pursue certain document categories, threatening to file the present [Reconsideration] Motion and then Motion for Review should Relator not relent[.]” ECF No.156, Opp'n at 4 (emphasis in the original). Next, Relator argues that Defendants “offer no reason for reconsideration that could not have been argued in the Motion to Compel briefing[,]” but “[i]nstead, Defendants filed an opposition with hardly more than two pages of argument focused not on waiver, but on whether the waiver issue was ripe before the Court.” Id. at 7 (emphasis in the original). Thus, Relator contends, “[y]ou cannot move to reconsider asking for a second bite at the apple[.]” Id. at 8. Relator adds that Defendants' reconsideration arguments fail because: (1) “[i]t is clear from the Order that the Court did give proper attention to work product and attorney-client privilege objections and intended for them to be waived[,]” id. at 9 (emphasis in the original); (2) “[t]hat courts have discretion over what sanction to apply, and that this Court chose a particular sanction after full consideration of the facts, is no basis for reconsideration[,]” id.; (3) the Court properly considered Defendants' previous burden and scope objections in the MTC Order, id. at 10; and (4) Defendants failed to address that the MTC Order also waived any boilerplate objections, id. 3. Defendants' Reply First, Defendants reply that contrary to Relator's accusations “Defendants have offered to run any ESI searches requested, and to produce anything Relator claims he still needs, with only the exception of privileged documents that are the subject of this motion.” ECF No. 163, Reply at 4 (emphasis in the original). Second, Defendants argue the Reconsideration Motion is proper because they contend that the Court “erred in analyzing the waiver all of Defendants' objections together as a whole, without giving due consideration to whether objections based on privilege should also be waived.” Id. Third, Defendants assert that there is no presumptive waiver of privilege objections and that courts “engage in a case-by-case analysis of whether such privileges should be waived under the circumstances.” Id. at 6. Fourth, Defendants argue “Relator's only argument on this point is that [the] Court has discretion, but has not cited any cases where a court waived attorney-client and work product privileges in the absence of bad faith, dilatory tactics, or some other substantial prejudice to the moving party.” Id. at 8 (emphasis in the original). II. LEGAL STANDARD A. Motion for Reconsideration Under United States District Court, Central District of California Local Rule (“L.R.” or “Local Rule”) 7-18, “[a] motion for reconsideration of an Order on any motion ... may be made only on the grounds of”: *4 (a) a material difference in fact or law from that presented to the Court that, in the exercise of reasonable diligence, could not have been known to the party moving for reconsideration at the time the Order was entered, or (b) the emergence of new material facts or a change of law occurring after the order was entered, or (c) a manifest showing of a failure to consider material facts presented to the Court before the Order was entered. “A motion for reconsideration ‘should not be granted, absent highly unusual circumstances, unless the district court is presented with newly discovered evidence, committed clear error, or if there is an intervening change in controlling law.’ ” Dragan v. Valladolid, CV 18-448-MWF (FFMx), 2021 WL 3260605, at *2 (C.D. Cal. Apr. 5, 2021) (quoting Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 880 (9th Cir. 2009)). Local Rule 7-18 also provides that “[a]bsent good cause shown, any motion for reconsideration must be filed no later than 14 days after entry of the Order that is subject to the motion or application.” Finally, “[c]ourts in this district have interpreted Local Rule 7-18 to be coextensive with Rules 59(e) and 60(b).” Tawfilis v. Allergan, Inc., SACV 15-307-JLS(JCGx), 2015 WL 9982762, at *1 (C.D. Cal. Dec. 14, 2015). B. Waiver of Objections “The party to whom the [Request for Production] is directed must respond in writing within 30 days after being served.” Fed. R. Civ. P. 34(b)(2)(A). The requesting party “is entitled to individualized, complete responses to each of the [Requests for Production] ..., accompanied by production of each of the documents responsive to the request, regardless of whether the documents have already been produced.” Golden v. Am. Pro Energy, EDCV 16-891-MWF (KKx), 2017 WL 2701920, at *7 (C.D. Cal. June 22, 2017) (citing Louen v. Twedt, 236 F.R.D. 502, 505 (E.D. Cal. 2006)). “Failure to object to requests for production of documents within the time required constitutes a waiver of any objection.” See id. (citing Richmark Corp. v. Timber Falling Consultants, 959 F.2d 1468, 1473 (9th Cir. 1992)) Similarly, under Rule 33, any ground to object to an interrogatory that is not stated in a timely objection is waived unless the court, for good cause, excuses the failure. Fed. R. Civ. P. 33(b)(4). “Courts have the discretion to relieve a late-responding party from the potentially harsh consequences of waiver.” Shacar v. Trans Union LLC, Case No. CV20-11115 AB (RAOx), 2021 WL 6496405, at *3 (C.D. Cal. Sept. 22, 2021). “To determine whether there is good cause to find objections are not waived, courts consider (1) the length of delay, (2) the reason for delay, (3) the existence of bad faith, (4) the prejudice to the party seeking waiver, (5) the nature of the request, and (6) the harshness of imposing sanctions.” Id. (internal quotation marks and citations omitted). III. DISCUSSION A. Defendants Fail to Meet the Standard for Reconsideration. Defendants contend that reconsideration is warranted because “this Court erred in analyzing the waiver of all of Defendants' objections ... without giving due consideration to whether objections based on privilege should also be waived ... where the only basis for finding waiver was the untimeliness of Defendants' responses.” ECF No. 154, Recons. Mot. at 4. However, Defendants failed to address whether, or to what extent, their objections were waived in their MTC Opposition. See generally ECF No. 93, MTC Opp'n. Instead, Defendants argued that the Court was without jurisdiction to review the MTC because Defendants withdrew one of their objections and claimed “a favorable outcome by this [C]ourt will not cause any further documents or information to be disclosed because none have been withheld.” See id. at 4-5 (emphasis in the original). *5 Defendants' MTC Opposition missed the mark by failing to address the issue of waiver, and their Reconsideration Motion does so too because Defendants now address waiver for the first time. Defendants do not meet the standard for seeking reconsideration, arguing that because the “Local Rules expressly prohibit Defendants from repeating prior arguments in seeking reconsideration[,]” “it is not entirely clear how this would be a basis for denial[.]” ECF No. 163, Reply at 5. Case law is clear, however, that “[m]otions for reconsideration ... should not be utilized to raise new arguments that could have been raised in the original briefs.” Diary Emps. Union Loc. No. 17 Christian Lab. Ass'n of U.S. Pension Tr. v. Poel, No. CV 12-4550 FMO (OPX), 2015 WL 13806767, at *3 (C.D. Cal. Sept. 26, 2015) (quoting Motorola, Inc. v. J.B. Rodgers Mechanical Contractors, Inc., 215 F.R.D. 581, 582 (D. Ariz. 2003)). “Nor should a motion for reconsideration be used to ask the court to rethink what it has already thought through.” Id. (citations omitted). Local Rule 7-18 requires a “showing of a failure to consider material facts presented to the Court before such a decision[,]” meaning that this Court would have failed to properly consider an argument that Defendants presented to it in the original MTC Opposition. See L.R. 7-18(c) (emphasis added). Accordingly, Defendants fail to meet the standard warranting reconsideration, and the Reconsideration Motion is DENIED. B. Defendants' Reconsideration Motion Fails for Additional Reasons. Defendants assert that the Court did not give due consideration to waiver of the attorney-client privilege and work product doctrines because, in sum, “waiver of the attorney-client privilege is a harsh sanction reserved generally for unjustified, inexcusable, or bad faith conduct[.]” ECF No. 154, Reconsideration Mot. at 5 (quoting Moe v. Sys. Transp., Inc., 270 F.R.D. 613, 623 (D. Mont. 2010)). In the MTC Order, the Court did not find waiver of all objections based solely on Defendants' delay, but because Defendants' conduct in responding to discovery was unjustified and inexcusable. First, Defendants made an inadequate attempt to obtain an extension on the discovery responses by asking for an extension on the day their responses were (presumably) due and taking Relator's non-response to their extension request as freedom to produce responses a month and a half later. See ECF No. 140, MTC Order at 5 (discussing length of delay). Second, in the MTC Opposition, Defendants failed to acknowledge or explain their delay. See id. at 5 (“[T]here was no reason provided for this delay[.]”). Third, Defendants argue that they “provided substantive responses, including inserting privilege claims, prior to any court intervention,” ECF No. 154, Reconsideration Mot. at 6, but Defendants only did so on February 15, 2023, after Relator requested court intervention, see ECF Nos. 69, Mot. for Order for Informal Disc. Dispute; 89-1, Decl. of Mike Bothwell in Supp. of Relator's MTC at ¶ 7. “[E]ngag[ing] in significant informal efforts to resolve discovery disputes[,]” ECF No. 154, Reconsideration Mot. at 6, after the responses were already late, “does not explain [Defendants'] failure to timely respond before court-intervention was necessary[,]” ECF No. 140, MTC Order at 5. Fourth, when Defendants did respond, they merely provided boilerplate objections that were insufficient to raise privilege objections, see, e.g., ECF No. 89-2, Defendants' Objs. and Resp. to Relator's First RFPs, which the Court also pointed out in the MTC Order, ECF No. 140, MTC Order at 6. It is well established that “blanket refusals inserted into a response to a Rule 34 request for production of documents are insufficient to assert privilege.” Burlington N. & Santa Fe Ry. Co. v. U.S. Dist. Court for Dist. of Mont., 408 F.3d 1142, 1149 (9th Cir. 2005). Moreover, Defendants did not provide a privilege log until April 28, 2023, the same day Defendants opposed Relator's MTC. See ECF No. 100-1, Decl. of Mike Bothwell in Supp. of Relator's MTC Reply at ¶ 2. That is six-months after Defendants' responses were originally due in November 2022, four-months after the agreed-upon extension in late December 2022, and two-months after serving late and insufficient discovery responses. Under these circumstances,[2] and “[i]n the absence of mitigating considerations[,]” the Court properly deemed Defendants' privilege objections waived. See Burlington, 408 F.3d at 1149 (five-month delay in producing a privilege log, absent mitigating circumstances, “alone would immunize the district court's ruling from reversal”). *6 Fifth, the Court also found waiver appropriate given Defendants' contention that they were not withholding any documents based on their belated objections, but were, in fact, withholding documents based on privilege, and yet failed to address the propriety of their privilege assertions in light of possible waiver in the MTC Opposition. See ECF No. 140, MTC Order at 6 (“Thus, Defendants are standing on a previous assertion of privilege despite arguing ‘a favorable outcome by this court will not cause any further documents or information to be disclosed because none have been withheld.’ ” (quoting ECF No. 93, MTC Opp'n at 4) (emphasis in the original)). In sum, Defendants' conduct demonstrates the kind of “evidence of foot-dragging or a cavalier attitude towards ... following the discovery rules [that] supports finding waiver” of attorney-client privilege and work product. Ritacca v. Abbot Labs., 203 F.R.D. 332, 335 (N.D. Ill. 2001). Accordingly, the Court finds that its MTC Order properly deemed Defendants' privilege and work product objections waived. C. Waiver of Attorney-Client Privilege and Work Product Will Be Limited to Pre-Commencement Documents and Communications. As a preliminary matter, the Court is bothered by the behavior of counsel in this case—both in Defendants' discovery related conduct and Relator's attempt to leverage the MTC Order to gain unfettered access to all of Defendants' documents and communications with their counsel. Though the Court finds that waiver of the attorney-client and work product privileges appropriate, the Court expects the parties to conduct themselves appropriately and only seek discovery that is within the reasonable bounds of the Rules. Fed. R. Civ. P. 26(b)(1) advisory committee's note to 2015 amendment (“The parties and the court have a collective responsibility to consider the proportionality of all discovery and consider it in resolving discovery disputes.”). Rule 26 directs the Court to limit discovery sua sponte or by motion where: (1) “the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source”; (2) “the party seeking discovery has had ample opportunity to obtain the information by discovery”; and (3) “the proposed discovery is outside the scope permitted by Rule 26(b)(1).” Fed. R. Civ. P. 26(b)(2)(C). “This Rule has been applied to address improper discovery where the respondent had waived objections by failing to raise them.” Olmos v. Ryan, CV-17-3665-PHX-GMS (JFM), 2020 WL 1904631, at *3 (D. Ariz. Apr. 17, 2020). As the Olmos Court explained: The Court does not understand the application of Rule 26(b)(2)(C) to be a substitute for timely objections. Rather it is a limit on discovery plainly outside the scope of discovery. “Even where the court deems the party's objections to have been waived, it has the discretion to decline to compel production where the request far exceeds the bounds of fair discovery.” Fifty-Six Hope Rd. Music, Ltd. v. Mayah Collections, Inc., [No. 2:05-cv-01059-KJD-GWF,] 2007 WL 1726558, at *4 (D. Nev. June 11, 2007). This strikes the balance between the judicial inefficiency of having to address discovery disputes the parties have failed to appropriately address, and the inefficiency of requiring compliance with plainly improper discovery request. It calls on the Court to act only where there is no fair argument in favor of discovery. Id. Here, the Court finds Relator's insistence that Defendants “divulge all [their] attorney-client privileged communications and [their] very work product in this case” “up to the present day” to far exceed the bounds of fair discovery. See ECF No. 154, Recon.Mot. at 7. It would be unduly burdensome and unreasonably cumulative to require Defendants' counsel to provide Relator every communication with their clients and work product produced in defending this case from the commencement of litigation to the present day. To allow Relator unfettered access to Defendants' litigation strategy and communications after the commencement of the litigation would put Defendants at too great of a disadvantage and unfairly punish Defendants for the mishandling of discovery by their counsel. Under the Court's discretion, the Court finds limiting the waiver of attorney-client privilege and work product to prior to the initiation of the lawsuit sufficient to protect Defendants' ability to defend against this suit and address Defendants' failure to timely respond to the First RFPs and Interrogatories and assert their privilege objections. Therefore, the Court will limit the waiver of Defendants' attorney-client privilege and work product protections to only those documents or communications dated before the commencement of this litigation, which the Court deems to be the filing of the initial Complaint on September 9, 2020. IV. CONCLUSION *7 For the reasons set forth above, Defendants' Reconsideration Motion is DENIED. However, waiver of any attorney-client communications and work product will be limited to documents and communications dated prior to the commencement of the litigation on September 9, 2020. IT IS SO ORDERED. Footnotes [1] Defendants Jeffrey Bottomley and Richard Rotan also filed a Motion to Dismiss that is currently pending before the District Court Judge. ECF No. 137. [2] The Court acknowledges that there is no per se waiver of attorney client privilege where a party fails to provide a privilege log within the time limits of Rule 34. Burlington, 408 F.3d at 1142. Here, however, not only did Defendants fail to produce a privilege log, they also failed to respond completely to the RFPs and assert the privilege in a timely fashion. In any event, the Court finds the circumstances here to be sufficient to satisfy the Burlington standard for determining waiver where a party failed to produce a privilege log.